With the increasing investment in Cryptocurrency, people are trying to figure out ways to ensure the security of their funds and Wallets. Stories of losing huge funds stored in Cryptocurrency accounts have made people interested in guarding this asset through an Estate Plan. The difference between Cryptocurrency and other tangible assets in terms of access, function, management, and protection affects the entire process of Estate Planning.
Security Has Become Priority
Access details are the only information required to unlock Cryptocurrency accounts, with such an arrangement it will be absurd for a Crypto Asset holder to share confidential details about Wallets and Exchange accounts possessing huge funds. At the same time, these details are required in an Estate Plan along with an access procedure guide to unlock the Cryptocurrency accounts for beneficiaries after the death or incapacitation of the owner.
This process creates a dilemma for many people some of whom sought the risky option of writing these details on papers and trying to store them safely. These papers can easily get lost compromising the secrecy of the access details. The story of Stefan Thomas is an example of ignorance and poor planning for Cryptocurrency resulting in the loss of millions.
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The importance of Access Details, for instance, a Private key is evident and many may resolute to maintain its security by even quitting the decision to make arrangements for Cryptocurrency accounts as a part of their Estate Plan but this haste could land beneficiaries in trouble, in case of sudden demise or incapacitation of the account holder.
No court order can bring back the only way to access Crypto accounts i.e. the Private key, hence the funds will be lost forever. Steering away from legal planning for Crypto Assets is not an option today when state authorities are attempting to build ways to facilitate the needs raised by technical advancements.
RUFADAA is a result of these attempts which try to make accessing Digital Assets simpler for the beneficiaries of a deceased person but the process involves mentally and physically exhausting paperwork and court proceedings.
A Trust in your Estate Plan can make the process of handling your assets over to your beneficiaries easier and secure by removing the risk of Probate. A better approach towards planning for Cryptocurrency accounts is to create a Digital Estate Plan that facilitates the needs of all kinds of Digital Assets.